Bally Aims To Be A Leisure-time Giant

December 26, 1985|By Los Angeles Times

CHICAGO — At the height of Pac-Man's popularity, distributors of the video-arcade game lined up trucks behind Bally Manufacturing's Bensenville, Ill., factory so they could load the game as it rolled off the assembly line.

In 1982 the video gobbler helped lift Bally's profit to $91 million. But the public's appetite for Pac-Man was not endless; last year, Bally lost $100.4 million on revenue of $1.35 billion.

But it hasn't been Bally's style to avoid risk as it pursues its ambition of becoming one of the nation's largest leisure-time companies.

Only 10 years ago a little-known maker of pinball machines, the concern has expanded until it now owns the nation's largest collection of health clubs and second-largest chain of amusement parks. It is one of the largest casino companies, owning Park Place Hotel and Casino in Atlantic City, and is about to complete a $440 million purchase of MGM Grand Hotels.

Robert E. Mullane, Bally's chairman, president and chief executive officer, said Park Place provided $273 million, or 20 percent, of Bally's 1984 revenue. But Moody's Investors Service noted last week as it reduced Bally's bond rating that the new hotels will be only ''marginally profitable'' because their debt service of $80 million a year will about equal their cash flow.

Bally also faces skepticism on Wall Street about its health clubs and amusement parks, two units that each contributed 25 percent of last year's revenue.

Bally's Health & Tennis Corp. of America, purchased in 1983, operates 323 health clubs under a variety of names, including Bally, Richard Simmons and Holiday. The unit's revenue grew 20 percent to 30 percent a year during the past decade, and Bally officials had said they expected it to be the company's leading profit-maker in 1985.

But projections were scaled back this fall with news that Bally had increased reserves for questionable debts after an abrupt rise in unpaid memberships.

Bally's Six Flags Corp., which operates seven amusement parks in seven states, is second in size only to Walt Disney Productions' theme-park operations. But some analysts say the parks will grow slowly and that attendance is vulnerable to bad weather and recessions.